Tuesday, May 11, 2010

Mortgage crisis in the UK

Bank of England published a very interesting survey of household financial conditions in the UK. The following graph shows quarterly percentage changes in the house purchase and remortgaging dynamics in the UK between Q2:2007 and Q1:2010. As the graph indicates, there is an excess volatillity in the housing market as a result of loose monetary policy and unpredictable mortgaging changes. Housing markets reflect the instability of the UK economy.

House purchase and remortgaging dynamics in the UK

Source: Bank of England, 2010 (link)

1 comment:

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